If the desired reserve/deposit ratio equals 0.10, then every dollar of currency in bank vaults supports ______ of the money supply, while every dollar of currency held by the public contributes ______ to the money supply.

Question

Quizplus · Accepted Answer

Every dollar in bank vaults can support $10 of the money supply due to the reserve ratio of 0.10, while every dollar held by the public contributes $1 directly to the money supply.

If the Desired Reserve/deposit Ratio Equals 0